This is the company's biggest payout on an acquisition since 2005 when Oracle splashed out $11.1 billion on PeopleSoft.
NetSuite produces software that runs within its cloud or its own data centers rather than customers' own hardware. This system enhances flexibility and saves the customer money; Oracle is in direct competition with other leading IT manufacturers to increase its cloud offerings, and this acquisition will help that cause.
NetSuite was founded by a former Oracle executive, bringing the story full circle. Oracle has traditionally sold its programs for customers to install within their own data centers, and CEO Larry Ellison has been famously outspoken about cloud computing being a 'fad', but it appears he has had a change of heart.
Investors of NetSuite will receive $109 per share, which is a 62 percent premium to the company's Wednesday closing price of $67.42.
Shares of Oracle have slipped 19 cents to $40.74.
The transaction is expected to close this year.
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